Many people have an interest in installing electricity-producing solar panels on their property because of the cost savings, governmental incentives, and environmental impact that solar power can provide. For almost as many people, however, the cost of purchasing and installing such solar panels is prohibitively expensive. For a typical two-story, 2,000-square-foot home, the cost to install solar panels and the related equipment for generating electrical power can range between $20,000 and $50,000. Many states provide cash rebates to homeowners and various other entities who install solar panels, but the rebate is usually only a small portion of the total installed costs. The remaining costs the homeowner or other entity (e.g., business owner, nonprofit organization or governmental entity) (“Property Owner or party”) must pay are too great in many cases, which may be contributing to the delay of widespread adoption of residential solar power.
Recently, there have been several proposals to improve the economics of purchasing rooftop solar panels. One proposed business model is for a company (commonly referred to as a “solar integrator”) that sells and installs solar panels and related equipment (“solar power system”) to install the solar panels and related equipment at the Property Owner's property. However, the solar integrator retains ownership (and in this context is commonly referred to as a “PPA Provider”) of the solar power system, and the Property Owner, instead of paying for the solar power system, merely pays for the electricity produced by the solar power system, which may be governed by the terms of a power purchase agreement (“PPA”) or lease agreement or some combination of each. In some models, the electricity rate charged by the solar integrator is fixed below what the local utility is expected to charge over time. At the end of the lease or PPA term, which typically ranges from five to 25 years, the Property Owner usually has the right to purchase the equipment outright. In this type of arrangement, however, the Property Owner typically will not be entitled to federal tax credits or state rebates during the PPA term because the Property Owner is not the owner of the solar power system during this time period. Also, in this type of arrangement the solar integrator is exposed to the risks associated with billing the Property Owner for electricity for solar electricity used. For example, the solar integrator is forced to expend the administrative expense necessary to implement customer billing. Also, the solar integrator is exposed to the credit risk of each individual customer.